The British government's possible resort to food price controls in the face of rampant inflation may fail if foreign suppliers find more lucrative markets, an academic says.
The Conservative government is reportedly mulling the introduction of price controls in a bid to achieve Prime Minister Rishi Sunak's pledge to get inflation down below five per cent — less than half last October's peak of over 11 per cent — by the end of the year.
UK and European Union sanctions on Russian energy imports over its military operation in Ukraine since early 2022 have sent energy bills and petrol pump prices soaring, with a knock-on effect on other goods.
In a TV interview on Sunday, Labour shadow work and pensions secretary Jonathan Ashworth called Sunak a "latter-day Edward Heath" in reference to the Tory PM from 1970 to 1974 who introduced a freeze on both prices and wages, along with rents and share dividends, in 1972 — a year before the last major energy crisis.
Dr Roslyn Fuller told Sputnik that state controls on retail prices was "not a new idea," pointing out that her native Canada has caps on some items like milk.
The academic said rocketing food prices — 50 per cent over last year on some items compared to the general inflation rate of around 10 per cent — were partly down to higher energy prices, labour shortages and this year's poor fruit and vegetable harvest in Spain.
But she also blamed producers for refusing to cut their profit margins, noting that "they seem to be hiking their costs more than they need to, using the general high inflation to disguise this."
"When grocery chains are price gouging, one can see how setting a cap is tempting," Fuller said. "Being able to do that effectively, of course, depends on how much of the food supply one ultimately controls in-country."
She pointed out that the UK imports 40 per cent of its food, cautioning: "You don't want to end up with a situation where suppliers and retailers decide to sell their produce elsewhere, because they can make more money doing so."
"That being said, quickly redirecting such streams of produce would also be challenging, so there would certainly be a window to work with," she added.
The government has so far spent £4.6 billion arming Ukraine to fight Russia while its sanctions on Moscow disrupt the economy at home.
Fuller pointed out that the Tories' policy for growing the economy was to cut tax on some businesses by £27 billion. "If they were desperate to find that £4.6 billion for military assistance, they could have easily just reduced the amount of their tax cuts."
"If they spend the £4.6 billion on British produced items — whether weaponry or relief items — they are ultimately boosting their own economy, anyway," Fuller argued, adding: "What countries commit in terms of assistance to other nations and what they actually deliver sometimes varies, so there's probably some flexibility on those numbers in any event."